An underwater mortgage -- or owing more than a house is worth -- is still a debt obligation. If too many people walk away and default, even if they can make payments, America will face a moral crisis.
The bankers should pay, Obama says. But some think the money would come out of shareholders’ pockets, and others say the big banks would pass it along to consumers and businesses.
To recoup taxpayer money used in the bailout of financial firms, Obama on Thursday outlined a fee that big banks would have to pay for 10 years or more.
Home mortgage foreclosures and delinquencies were up in the third quarter despite greater efforts to help homeowners. Defaults on modified loans were also high.